A recent study commissioned by Effective Coverage and performed by ORC International found that millennials who make up the 18-29 age group are 50% less likely to purchase home and renters insurance from a local insurance agency than their parents. Of all the groups surveyed, millennial renters were the least likely to purchase a policy from an independent agent.
Study Highlights
- 40% of all respondents purchased their home insurance policies from local insurance agencies, yet only 24% of millennials did.
- Renters purchase their renters insurance policies from local insurance agencies 26% of the time vs homeowners who work with local insurance agencies 43% of the time.
- Millennials purchase their home and renters insurance policies directly from insurance carriers at a rate higher than any other age group.
Millennials are now the largest, most diverse generation in the United States, but one thing seems to be a constant. They are increasingly not buying their insurance from local insurance agents.
In total, only twenty-six percent of renters go through a local agency. This means that even if they’re buying their car insurance through an agent, they’re going elsewhere for their renters insurance. That is a lost opportunity that all agents need to address.
Local insurance agencies should not be discouraged by these statistics… Instead it should be seen as an opportunity.
Before you understand how best to market is satisfy the needs of millennials please take a moment to understand them by understanding the brands that have shaped them.
Millennials have been shaped by GEICO.
GEICO has been spending over $1 billion annually for years on the simple message that consumers deserve cheap and fast insurance. Even the most sheltered millennial would have seen a GEICO advertisement hundreds if not thousands of times. The effective frequency model described by Thomas Smith said that a prospect is ready to buy by the twentieth time he sees that advertisement. The Millennial has been cultured to value price and speed while the independent agent is selling expertise and thoughtful coverage analysis.
Millennials have been shaped by Burger King.
According to research teams at the University of Missouri-Kansas City and the University of Kansas Medical Center, a child’s brain can be imprinted with fast-food restaurants’ logos and brands. The popular Burger King slogan “Have It Your Way” has taught millennials that even the largest brands in the world are willing to cater to their needs and desires. While agents may like to transact business in their own tried and true fashion, millennials have been taught to expect the interaction to be on their own terms.
Millennials have been shaped by Apple.
Apple has taught millennials to be innovative. According to a recent Deloitte Study, millennials describe themselves as innovative and wanting to work for and spend their money with innovative companies. The independent agent loses the notion of innovation the second that he suggests the millennial fax over his previous insurance information. The millennial thinks, “Who outside of doctors uses a fax machine anymore? “
Millennials want and/or need to buy insurance.
The type and limits may be different from those sought by other generations, but millennials still need to have contact with insurance companies or their agents in order to insure their cars, their homes, their jewelry, and even their startup companies.
Millennials will buy their insurance from you if you give it to them their way. Branding is crucial, but so is availability. They have to be able to find you and work with you whenever and wherever they find it convenient. Run your insurance agency like a startup and you’ll find success with Millennials – and everyone else. But you can’t just keep doing things the way you’ve always done them.